IPO Watch: Mineral sands explorer Relentless Resources charts course for ASX debut
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The ASX could be getting another heavy mineral sands (HMS) explorer with Relentless Resources flagging a near-term initial public offer.
The company has notified ASIC of its plans to undertake an IPO of 16 million new shares at 50c each to raise at least $8m.
It will also accept $2m worth of oversubscriptions.
The offer is set to open on December 7 and Relentless has a target listing date of January 23, 2019.
Relentless was incorporated in 2012 by David Fraser, who was the global head of distribution for one of Australia’s largest alternative investment companies.
There he was responsible for developing and raising capital for both domestic and offshore opportunities.
Mr Fraser also previously worked for investment bank Credit Suisse, where he was tasked with growing funds under management, managing high net worth client portfolios and facilitating investment opportunities for other banking divisions.
Relentless’ goal is to be in production by early in the final quarter of 2019.
The company says it has a “profitable low-cost starter project” called “Copi” with exposure to improving mineral sands prices.
Mr Fraser told Stockhead the company decided to launch an IPO now because it needed funding to get its Copi project into production within 18 months.
“We are also looking to raise the funds required to grow the current mineral resource at the Copi project and produce our maiden ore reserves for the feasibility study,” he said.
The project is tipped to be a 1.4-million-tonne-per-annum mine producing around 85,000 tonnes of concentrate containing zircon, rutile, leucoxene and ilmenite for an initial 10 years.
But Relentless expects it will extend the mine life due to recent drilling and a resource upgrade.
A definitive feasibility study is due out in February next year.
What exactly are mineral sands?
Mineral sands are old beach sands that contain zircon, ilmenite and other minerals.
They’re used in just about anything you can think of that we need in everyday life.
Ilmenite is the main source of titanium dioxide, a white pigment used in paints, fabrics, plastics, paper, sunscreen, food and cosmetics.
At one point American doughnut giant Dunkin’ Donuts even used titanium dioxide to make the powdered sugar on its donuts appear whiter.
Rutile is also used in the manufacture of ceramics, as a pigment, and for the production of titanium metal.
Zircon, meanwhile, has a high melting point, making it ideal for use in engines, electronics, spacecraft and the ceramics industry.
Leucoxene is a fine, granular alteration product of titanium minerals. Although it is not a recognised mineral species, the name leucoxene has been applied to products with a titanium content ranging from 70 per cent to 93 per cent.
Leucoxene is either sold for use in welding electrodes, which is a relatively small market, or as one of several feedstocks for titanium pigment plants.
Mr Fraser said the demand/supply gap is growing among zircon and titanium products.
“The current outlook shows there is an increasing demand for the products, but the supply from current and new producers will not meet the long-term demand and therefore will increase pricing, particularly zircon prices,” he said.
“Going by the industry authority TZMI’s November 2018 outlook, it looks like prices will remain strong and will remain on the upper end for the next five to eight years.”
Mr Fraser sees 3D printing becoming a new area of interest and growth.
“This will see new markets opening for our HMS products (zircon, rutile and ilmenite) to be used in goods and products, such as smartphone production, the aerospace industry, electronic vehicles and production of smarter building products, to name a few,” he explained